South Slocan, British Columbia – Later this year, Kalesnikoff Lumber Company will open its new $35 million mass timber facility in the West Kootenays, with full product line availability by the summer of 2020. The fully financed project includes the construction of a new 110,000 building on existing company land, as well as the purchase of state-of-the-art processing equipment and technology from companies in Canada and Europe. The plant will produce custom glulam and CLT products, creating 50 jobs in the community.
“We see mass timber as a natural and exciting innovation and next step for our company and team,” said Chris Kalesnikoff, chief operating officer, of Kalesnikoff Lumber Company. “We’ve done extensive research to ensure our new world-class equipment will create exceptionally high-quality cross-laminated timber and glulam beams. Our focus will be on full integration from the forest through cutting, drying, and manufacturing to the final finished and delivered products.”
The integrated specialty products company has been in operation since 1939, and currently operates a 75 million fbm capacity sawmill and reman plant, with around 150 employees. It mills 11 different species and offers over 1,000 different products in both custom as well as standard dimensional sizes for Japanese and North American markets. The company has a strong emphasis on sustainable forest practices. It received FSC certification in 2010.
Business Plan and Funding
Kalesnikoff described the mass timber project as “massive” from the perspective of the family-owned business. “It’s double any investment we’ve ever made as a company,” he explained. “And because of that, we did do some things that we hadn’t before.” One such step was working with its accounting firm in Vancouver to develop a rigorous business plan. The year-and-a-half process involved detailed modeling and 40-year future projections on where they thought the business could go.
Fortunately, a number of things worked in the company’s favor in securing financing, including solid business relationships, the thorough business plan, and the anticipated demand growth for mass timber.
“I think we’re a very well-respected company in the sawmill industry, just given our 80-year history,” Kalesnikoff said. “So right away, there’s something telling about who we are and what kind of business we are—the character people we are.” That reputation and strong business relationships, coupled with a detailed business plan and the excitement surrounding the mass timber market assisted in getting this project financially off the ground.
Also helpful in the process was the familiarity that lenders had with mass timber as a result of them also working with construction companies. “Lenders had construction relationships, so they had some grasp of what mass timber is all about, and what an impact it should have in the marketplace,” he said.
No government funding was received for the Kalesnikoff project, although politicians have been generally supportive of it. They have also been instrumental to the development of the mass timber market through building code changes as well as approving public sector projects that utilize mass timber. “The fact that they are supporting the industry is probably as important (as funding assistance) in the long run,” he said.
In March, the Province of British Columbia invited eligible local governments to become early adopters of mass timber technology for the construction of buildings up to 12 stories in advance of anticipated changes to Canada’s Building Code in 2020. BC Premier John Horgan visited the Kalesnikoff project construction site in late April.
Equipment Selection and Finding Employees for the Kalesnikoff Mass Timber Project
Kalesnikoff Lumber started looking into mass timber about six years ago. Early in the process, the company attended the Ligna show. They touched base with several equipment suppliers and manufacturers, who then arranged plant visits to leading mass timber manufacturers in Europe. “We got to see the equipment, we got to see the process, and we got to see the end product,” Kalesnikoff said. He noted that the mass timber industry is over 20 years old, so there were several machinery options available to them.
“There’s at least three to four key reliable suppliers for any of the equipment you need,” he continued. “So, whether it be finger joint machines or planers, or presses, or other stuff, there were key groups that we were able to meet. And from there, it was really starting to narrow down which suppliers we wanted to work with.”
The company decided to go with Kallesoe Machinery, a family owned Danish company, for a majority of its equipment, as well as Quebec-based Conception RP for its finger joint line. Other pieces of equipment are being sourced from Italy, Germany, and Slovenia. Kallesoe offers a range of high frequency press line solutions for CLT and glulam.
Kalesnikoff does not anticipate any issues with filling the 50 anticipated positions resulting from the mass timber project. “We live in a beautiful part of British Columbia and the population is growing,” he explained. “People are moving into our areas from some of the big cities and other areas just for the lifestyle. So, we’ve been pretty fortunate where we tend to have people who want to live here.”
About two-thirds of the new positions will be operational roles, and the company is comfortable with training the new manufacturing employees and getting them up to speed. “You have to learn the equipment, but that’s our strength,” he said.
The other one-third of the employees added, however, will require a different skill set than the company has required in the past. The sales and marketing role will involve close collaboration with designers and customers to “bring projects to life.” Working closely on custom projects, their role will involve communicating data back to the plant so that products can be accurately manufactured to specification.
Kalesnikoff noted that while the trend is for forest sector investment to be leaving British Columbia as Canadian producers build mills in the United States, he believes it is important to invest locally.
“My sister and I are both executives in the business, and our dad is still the president and CEO,” Kalesnikoff said, in reflecting on the investment, his family’s legacy and the importance of its sustainability aspirations. “We’re fourth generation, we’re very proud of that. And we’re very proud to be investing back in our community and local workforce. We love where we live, and we think we have some of the most unique value timber in the world.”
